Progress and Poverty, Volumes I and II: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of WealthGeorge, Henry
General
Progress and Poverty, Volumes I and II: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth
George, Henry
Economics; Single tax
Thus, although they may from time to time alter in relation to each
other, as the circumstances which determine relative levels change, yet
it is evident that wages in all strata must ultimately depend upon
wages in the lowest and widest stratum—the general rate of wages rising
or falling as these rise or fall.
Now, the primary and fundamental occupations, upon which, so to
speak, all others are built up, are evidently those which procure
wealth directly from nature; hence the law of wages in them must be
the general law of wages. And, as wages in such occupations clearly
depend upon what labor can produce at the lowest point of natural
productiveness to which it is habitually applied; therefore, wages
generally depend upon the margin of cultivation, or, to put it more
exactly, upon the highest point of natural productiveness to which
labor is free to apply itself without the payment of rent.
So obvious is this law that it is often apprehended without being
recognized. It is frequently said of such countries as California and
Nevada that cheap labor would enormously aid their development, as it
would enable the working of the poorer but most extensive deposits of
ore. A relation between low wages and a low point of production is
perceived by those who talk in this way, but they invert cause and
effect. It is not low wages which will cause the working of low-grade
ore, but the extension of production to the lower point which will
diminish wages. If wages could be arbitrarily forced down, as has
sometimes been attempted by statute, the poorer mines would not be
worked so long as richer mines could be worked. But if the margin of
production were arbitrarily forced down, as it might be, were the
superior natural opportunities in the ownership of those who chose
rather to wait for future increase of value than to permit them to be
used now, wages would necessarily fall.
The demonstration is complete. The law of wages we have thus obtained
is that which we previously obtained as the corollary of the law of
rent, and it completely harmonizes with the law of interest. It is,
that:
_Wages depend upon the margin of production, or upon the produce which
labor can obtain at the highest point of natural productiveness open
to it without the payment of rent._
This law of wages accords with and explains universal facts that
without its apprehension seem unrelated and contradictory. It shows
that:
Where land is free and labor is unassisted by capital, the whole
produce will go to labor as wages.
Where land is free and labor is assisted by capital, wages will consist
of the whole produce, less that part necessary to induce the storing up
of labor as capital.
Where land is subject to ownership and rent arises, wages will be fixed
by what labor could secure from the highest natural opportunities open
to it without the payment of rent.
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